December 2011, Newsletter

Making sure you have an income even if you are unable to earn one

Whether or not you live to work, you probably still need to work to live.

Mortgage repayments, food, petrol, utility bills, school fees – chances are, unless you have a nine-figure savings account, you rely on your regular paycheck to sort these out.

What if you fell ill, became injured, or something else went wrong and you were off work for some time – could you keep up with your daily living expenses without your steady income?

Through your UniSuper membership, you may be able to protect your income to make sure you – and whoever relies on you – remains fed, clothed and housed until you get back on your feet.

How can you make sure you’re covered?

Depending on your membership, you may be eligible for the following benefits:

• Accumulation 1 and Spouse Account members: Optional Income Protection Insurance
• Defined Benefit Division and Accumulation 2 members: Inbuilt Temporary Incapacity Benefits

Depending on your type of membership, you could also have the opportunity to protect your wealth through optional death and disablement insurance cover, or (for DBD and Accumulation 2 members) other inbuilt benefits. For more information:

• Optional insurance cover for members booklet
• Super for Defined Benefit Division and Accumulation 2 members product disclosure statement 

Affordable income protection for Accumulation 1 and Spouse account members

Accumulation 1 and Spouse account members can apply for optional Income Protection cover when they join the Fund. Even better, you won’t have to give health evidence on joining UniSuper, provided you meet the eligibility criteria.

Optional Income Protection cover provides a monthly benefit for up to two years if you are assessed as temporarily unable to do your job because you are partially or totally disabled.

You can see the definitions of partial disability and total disability, as well as the eligibility criteria and other important information, in the Optional insurance cover for members booklet.

The cost of this cover is unit-based – which means the benefit you could receive depends on the number of units of Optional Income Protection Insurance you purchase. It is provided in multiples of $100 per week.

Optional income protection insurance can be surprisingly affordable. The table below shows the annual premium required to protect $100 per week of income for eligible applicants.

Age next birthday	Annual premium to protect $100 per week* (cost per unit of cover)
16-39	$5.20
40-44	$7.76
45-48	$12.96
49-51	$18.16
52-54	$23.31
55-57	$36.27
58-60	$46.63
61-63	$69.98
64	$46.63
65	$15.56

*Premiums shown include an administration fee, which covers the costs associated with administering the insurance arrangements. The administration fee is inclusive of GST and the benefit of any tax credits that are applicable to the Trustee.

Example

Debbie is 42 years old with a UniSuper Accumulation 1 account. She needs $800 of income a week to cover her mortgage, bills, food, children’s school fees, and other expenses. She has decided to purchase eight units of Optional Income Protection cover to make sure she can still afford to pay for these expenses even if she can’t work for some time. The annual premium to protect $100 a week for her age group is $7.76, so eight units of cover will cost her $62.08 per year.

These competitive premiums come out of the Accumulation component of your super account, rather than your personal savings account, in arrears on a monthly basis.

Inbuilt Temporary incapacity benefits for DBD and Accumulation 2 members

If you are a UniSuper Defined Benefit Division (DBD) or Accumulation 2 member, you may be eligible for inbuilt temporary incapacity benefits. These are part of UniSuper’s inbuilt benefit provisions, which are provided by the Fund, rather than an external insurance provider.

Like optional insurance cover, a temporary incapacity benefit is usually paid on a monthly basis for a maximum of two years, provided certain conditions and criteria are met.

You can see more on eligibility criteria, how your benefit is calculated, important definitions, charges, and other conditions for DBD or Accumulation 2 members in the Super for Defined Benefit Division and Accumulation 2 members product disclosure statement.

How do you make a claim?

If you do have to take some time off work while you recover from an illness or injury, your first step should be to make a claim.

To claim for income protection, Accumulation 1 and Spouse Account members should call the UniSuper Helpline on 1800 331 685. Our Member Services Consultants will guide you through your options and provide you with more information and the appropriate forms and product disclosure statements.

DBD and Accumulation 2 members should refer to the Temporary incapacity benefits for Defined Benefit Division and Accumulation 2 members who are temporarily unable to work fact sheet. Of course, you can also call the UniSuper Helpline if you have any questions or wish to be guided through the process.

Prepared by UniSuper Management Pty Ltd (ABN 91 006 961 799, AFSL No. 235907) on behalf of UniSuper Limited ABN 54 006 027 121 the trustee of UniSuper (ABN 91 385 943 850).
This information is of a general nature only and includes general advice. It has been prepared without taking into account your individual objectives, financial situation or needs. Before making any decision in relation to your UniSuper membership, you should consider your personal circumstances, the relevant product disclosure statement for your membership category and whether to consult a licensed financial adviser.
The information is current as at 30 November 2011 and is based on our understanding of the legislation. Information is subject to change.